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If pilots or flight attendants are displaced, how is the per diem calculation determined?

Displaced flight crewmembers are airline pilots or flight attendants who have been involuntarily transferred out of their base or domicile. The reason the subject of displacement is important for airline pilot tax or flight attendant tax issues is that pilots and flight attendants who are transferred away from their tax home may be able to take advantage of increased travel deductions, including a bigger per diem deduction because it is possible that the pilot or flight attendant might be considered to be on temporary duty.

As mentioned in the definition of temporary duty, a temporary duty assignment is one that is away from the pilot or flight attendant's tax home, is expected to last for less than one year, and in fact does last for less than one year.

Why would it be advantageous for a displaced flight crew member to understand how a temporary assignment affects the per diem calculation?

It may be advantageous for a pilot or flight attendant to consider the temporary duty clause in the tax code before they are displaced.  A hypothetical situation for a pilot might be as follows:

An Airline has the following three domiciles: CLE (Cleveland Hopkins), EWR (Newark Liberty), and IAH (Houston Bush). Assume Amanda, a flight attendant for the airline, is based in CLE. Due to base shrinkage, Amanda is displaced out of CLE and awarded her second choice (IAH). Amanda had planned to move to IAH eventually, but for personal reasons she won't be able to move to Houston for at least two years. Because Amanda's second bid choice after CLE was IAH, Amanda was awarded IAH when she was displaced out of CLE. For the next two years, before Amanda is able to actually move to Houston, she is forced to commute to IAH from CLE. Unfortunately, Amanda is probably unable to deduct the travel expenses associated with commuting to IAH because she plans to move there and she remains based in IAH the entrie time while living in Cleveland, Ohio. In other words, IAH becomes Amanda's new tax home immediately after she is displaced because this situation is not a temporary duty assignment.

Amanda could bid to EWR before a year goes by after being awarded IAH, then bid back to IAH before a year passes while based in EWR, but she needs to be careful to stay within the definition of a temporary assignment if she wants to write-off her commuting expenses. The point is that if Amanda is not considered to be on a temporary assignment, the costs associated with getting to her displaced base from Cleveland and back are considered to be commuting expenses to a tax home and are not deductible.

If Amanda had chosen EWR as her second choice on her system bids (even though she eventually planned to move to IAH) she might have been able to consider herself to be on a temporary assignment in EWR. As long as she only remained based in EWR for less than one year, that would have entitled Amanda to more travel tax deductions for the expenses she incurred commuting to EWR from CLE. Why?  Because in that situation (and for that time period), EWR would not be her tax home. CLE would. In other words, Amanda would be considered to have been traveling away from her tax home (Cleveland, Ohio) as soon as she left CLE.

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